A DeFi Paradigm Shift: Hover’s Pioneering Non-Custodial Liquidity Market | Coinspeaker

A DeFi Paradigm Shift: Hover’s Pioneering Non-Custodial Liquidity Market

| Updated
by Andy Watson · 4 min read
A DeFi Paradigm Shift: Hover’s Pioneering Non-Custodial Liquidity Market
Photo: Hover

An onrush of technological innovation is propelling the world of finance into a new mode of operation. Decentralized finance (DeFi) is rapidly building the infrastructure for that alternative system aimed to reshape traditional finance.

Thanks to the introduction of a groundbreaking non-custodial liquidity market, Hover has arisen to reshape the lending arm of DeFi. Its highly adaptive platform caters to long term users and holders while satisfying key lending and borrowing requirements. Hover is built in collaboration with the Kava network, a blockchain that connects the ubiquitous Ethereum virtual machine with the adaptability of Cosmos SDK into a seamless co-chain system.

Rapid Growth of Kava Ecosystem

This innovative network is further empowering developers to create cutting-edge blockchain technologies and Web3 applications within an already thriving ecosystem. The Kava network achieves impressive block times of just six seconds across its global ledger, powered by its blazingly fast Tendermint Core consensus engine. The ecosystem has managed to record considerable growth, even through the testing times of the “Crypto Winter”, attracting hundreds of millions in Total Value Locked (TVL)

Additionally, Kava is encouraging the success of developers through Kava Rise, its pioneering TVL-based on-chain rewards program. The initiative, which offers a weighty $750 million in incentives, is playing a vital role in cultivating rapid growth within the ecosystem. It has already attracted more than 100 protocols to the Kava platform network.

The KAVA token serves as the core element for the platform’s security and governance, ensuring various essential functions such as block validation, parameter voting, while also fueling network expansion incentives.

The ecosystem embraces visionary co-chain architecture and a decentralized governance model, led by the Kava DAO, laying the groundwork of an exciting blockchain landscape centered on developers.

Hover Money Market Sets the Standard

With its pioneering technology, Hover’s money market is setting the standard for DeFi innovation. The protocol will facilitate the overcollateralized lending and borrowing of blue-chip assets, a core function of any DeFi ecosystem. This key DeFi offering will be tied into a VIP tier system bringing discounted rates and liquidation rebates to stakers.

Its $HOV token can be staked in return for $esHOV, which in turn can be used for discounted borrowing rates and liquidation rebates. Additionally, $esHOV allows for governance activity and can be converted to $xHOV, which enables regular protocol bonuses.

Discussing their philosophy behind Hover’s integrated tokenmoics, one of Hover’s core contributors, Vincent Wu said:

“When you look at the way most lending markets work, their token has essentially no value. It’s only used for governance and emissions. The first of which is rarely engaged in by the broader community with the second causing long-term problems for platform sustainability. High token emissions will attract liquidity in the short term, but bankrupt a project in the long run. We’ve designed Hover to offer meaningful value to those who actually use the platform. In other words, long term holder will having meaningful benefits from Hover’s token utility.”

This market will be monitored with 24/7 advanced risk modeling by Ledger Works in addition to its novel token utility. The setting of the market’s risk and rate parameters will be guided by real-time qualitative and quantitative financial data. All of which is helping to position Hover as the preeminent lending and borrowing protocol of Kava and Cosmos.

Hover as Prime Liquidity Partner for Kava

But Hover intends for more beyond lending and borrowing. The protocol’s capacity for seamless interoperability looks set to foster user opportunities as yet unseen in DeFi.

The Hover team has its sights set on being the prime liquidity partner for a broad array of Kava’s DeFi primitives, such as options, futures, and other derivative platforms. Via provision of stable liquidity markets for these protocols the company aims to boost the efficiency of Cosmos’ entire DeFi ecosystem.

Hover’s pioneering non-custodial liquidity market is launching within the Kava ecosystem in Fall 2023, and will offer its services to both retail and institutional users worldwide.

Marrying elegant simplicity with meaningful technological innovation, the Hover team is aiming for nothing short of a revolution in on-chain finance. With its robust financial services, advanced tokenomics and seamless interoperability, Hover looks set to propel DeFi into an even more dynamic phase.

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